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Sales & distribution management by Govind Kumar
- 1. By- Dr. Govind Kumar AssistantProfessor Faculty of Commerce & Management, Rama University
- 2. Importance ofpersonal sales: • Direct link to the customer • Most customers see the sales person as the company • Designing the sales force internationally is one of the most important functions of the marketing department
- 3. Sales Management? Sales managementis the coordination of people and resources to effectively produce the desired goal. These long term goals include increasing sales volume, contributing to the sales pipeline, and continuing to focus on growing revenue. To achieve these objectives, sales managers have vast responsibilities including, but not limited to: demand/sales forecasting, establishing quotas/objectives, budgeting, organization, recruitment, training, compensation, and sales performance evaluation.
- 4. The Important Tasksin Sales Management A. Sales Planning B. Recruitment of Sales Staff C. Sales Reporting
- 5. Roles and Responsibilities ofa Sales Manager A sales manager is responsible for meeting the sales targets of the organization through effective planning and budgeting. A sales manager can’t work alone. He needs the support of his sales team where each one contributes in his best possible way and works towards the goals and objectives of the organization. He is the one who sets the targets for the sales executives and other sales representatives. A sales manager must ensure the targets are realistic and achievable.
- 6. Salesmanship Salesmanship is justpersona selling – negotiating, emphasizing inducing and making the prospective buyer to take a decision in favor of going for the product being offered to him. In the words of W.G. Carter, “salesmanship is an attempt to induce people to buy goods.” Today salesmanship is only an effort to induce the people to buy. Instead, to put in the words of Whitehead, it is “the an of presenting art offering that the prospect appreciates the need for it and that a mutually satisfactorily sale follows.” The mutual satisfaction is greatly emphasized in an salesmanship.
- 7. 7 Key Responsibilities ofSales Managers 1. Selecting Targets Salespeople are capable and willing to talk to anyone, so you have to steer them to the right people. Are they talking to the decision makers who have authority and budget for expenditures? With your sales leadership, define and use a filter for the most likely candidates for successful deals.
- 8. 2. Defining Priorities Helpyour sales force prioritize what opportunities they pursue and how much time and effort they spend on them. Help them understand which leads are key opportunities — real and relevant to the current circumstances.
- 9. 3. Defining TimeGuidelines Set and enforce guidelines for how sellers spend their time. Meandering aimlessly through a territory or conducting leisurely “check in” sweeps is unproductive. Salespeople should be directed to take a strategic and surgical approach to identifying and pursuing targets.
- 10. 4. Monitoring Compliance Youare responsible for providing data that allows you and other leaders in the organization to monitor what is happening in the marketplace regarding customers, competitors and surrounding regulations and technology shifts. Consistency in the execution of a sales process gives data to the organization that clarifies what works and what does not. We’re not talking about activity management and monitoring for its own sake. Your focus should be working toward compliance in the sales process to protect the integrity of the data captured so everyone has relevant data for good decision making.
- 11. 5. Navigating theTerrain (Territory) Your sales process is the basis of action, but it’s only the start — a two-dimensional representation of a sequential process. The third dimension is using data (including variant data) from the sales process to assess the marketplace. Sometimes you’ll need a covert op — a team of select salespeople — to find out new information. Then it’s up to you to analyze what they bring back and use that information to up the game.
- 12. 6. Securing Resources Therewill be occasions when competing priorities (including those of other departments) derail progress on landing business. It’s your responsibility to make sure significant opportunities are visible to leadership. You need to take the actions that secure these deals from impeding parties inside your organization, and see that your people have the resources they need for a successful sale.
- 13. 7. Knowing When(and When NOT) to Expedite It’s your job to expedite—and to know when not to expedite. Like the “boy who cried wolf,” people may become jaded to repetitive intervention on your part. ” For the sake of the organization, your reputation (and that of your team), you’ll need to decide when an opportunity needs to be expedited, and when everyone should simply follow the normal sales process.
- 14. Qualities of asuccessful Salesman • To select personnel for international marketing positions effectively, management must choose individuals who have the following traits: • To select personnel for international marketing positions effectively, management must choose individuals who have the following traits: 1. Maturity1. Maturity 2. Emotional Stability2. Emotional Stability 3. Breadth of Knowledge3. Breadth of Knowledge 4. Flexibility4. Flexibility 5. Cultural Empathy5. Cultural Empathy 6. Energetic &6. Energetic & 7. Enjoy Travel7. Enjoy Travel
- 15. 5 Tips ForSetting Sales Goals 1. Put Your Sales Goals in Writing 2. Arrange for Sales Training 4. Conduct Efficient Recruiting 3. Control Spending 5. Ensure Consistent Follow-Through
- 18. SPIN Selling, agreat model, was the brainchild of Neil Rackham who authored a book of the same name in 1988. SPIN Selling proposes there are four types of questions, thus SPIN stands for : SPIN Model 1. Situation ( questions ) 2. Problem ( questions ) 3. Implication ( questions ) 4. Need-payoff ( questions )
- 19. 1. Situation Questions dealwith the facts about the buyers existing situation. 2. Problem Questions ask about the buyer's pain and focus the buyer on this pain while clarifying the problem, before asking implication questions. . These give Implied Needs. 3. Implication Questions discuss the effects of the problem, before talking about solutions, and develop the seriousness of the problem to increase the buyer's motivation to change. 4. Need-Payoff Questions get the buyer to tell you about their Explicit Needs and the benefits your solutions offers, rather than forcing you to explain the benefits to the buyer. Getting the buyer to state the benefits has greater impact while sounding a lot less pushy. What these questions do is probe for explicit needs.
- 20. SPIN Model ofSelling
- 21. Transactional Selling A termused to describe a sales strategy that involves focusing on achieving quick sales without a significant attempt to form a long term customer relationship. A transactional selling strategy tends to be more common for a business that offers a fairly generic product or service with the objective of profiting by making a high volume of sales.
- 22. Step1.Prospecting and QualifyingStep1.Prospectingand Qualifying Step2. Pre-approachStep2. Pre-approach Step3. ApproachStep3. Approach Step4.Presentation/DemonstrationStep4.Presentation/Demonstration Identifying and Screening For Qualified Potential Customers. Learning As Much As Possible About a Prospective Customer Before Making a Sales Call. Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Telling the Product “Story” to the Buyer, and Showing the Product Benefits. Steps in the Personal Selling ProcessSteps in the Personal Selling Process
- 23. Step 5. HandlingObjectionsStep 5. Handling Objections Step 6. ClosingStep 6. Closing Step 7. Follow-UpStep 7. Follow-Up Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business. Steps in the Selling ProcessSteps in the Selling Process
- 24. Market Demand Analysis Companiesuse market demand analysis to understand how much consumer demand exists for a product or service. This analysis helps management determine if they can successfully enter a market and generate enough profits to advance their business operations. While several methods of demand analysis may be used, they usually contain a review of the basic components of an economic market which are: Market identification Business cycle Product niche Growth potential Competition
- 25. Market Identification The firststep of market analysis is to define and identify the specific market to target with new products or services. Companies will use market surveys or consumer feedback to determine their satisfaction with current products and services. Comments indicating dissatisfaction will lead businesses to develop new products or services to meet this consumer demand. While companies will usually identify markets close to their current product line, new industries may be tested for business expansion possibilities.
- 26. Business Cycle Once apotential market is identified, companies will assess what stage of the business cycle the market is in. Three stages exist in the business cycle: emerging, plateau (area of stability) and declining. Markets in the emerging stage indicate higher consumer demand and low supply of current products or services. The plateau stage is the break-even level of the market, where the supply of goods meets current market demand. Declining stages indicate lagging consumer demand for the goods or services supplied by businesses.
- 27. Product Niche Once marketsand business cycles are reviewed, companies will develop a product that meets a specific niche in the market. Products must be differentiated from others in the market so they meet a specific need of consumer demand, creating higher demand for their product or service. Many companies will conduct tests in sample markets to determine which of their potential product styles is most preferred by consumers. Companies will also develop their goods so that competitors cannot easily duplicate their product.
- 28. Growth Potential While everymarket has an initial level of consumer demand, specialized products or goods can create a sense of usefulness, which will increase demand. Examples of specialized products are iPods or iPhones, which entered the personal electronics market and increased demand through their perceived usefulness by consumers. This type of demand quickly increases the demand for current markets, allowing companies to increase profits through new consumer demand.
- 29. Competition An important factorof market analysis is determining the number of competitors and their current market share. Markets in the emerging stage of the business cycle tend to have fewer competitors, meaning a higher profit margin may be earned by companies. Once a market becomes saturated with competing companies and products, fewer profits are achieved and companies will begin to lose money. As markets enter the declining business cycle, companies will conduct a new market analysis to find more profitable markets.
- 30. How to Organizea Sales Force
- 31. Sales Forecasting Forecasting IsOne Of The Important Aspects Of Administration. The Comer-stone Of Successful Marketing Planning Is The Measurement And Forecasting To Market Demand. According To American Marketing Association, “Sales Forecast Is An Estimate Of Sales, In Monetary Or Physical Units, For A Specified Future Period Under A Proposed Business Plan Or Programme And Under An Assumed Set Of Economic And Other Forces Outside The Unit For Which The Forecast Is Made.”
- 32. Factors Influencing A SalesForecasting I. General Economic Condition II. Consumers III.Industrial Behaviours IV. Changes Within Firm V. Period
- 33. Importance of SalesForecasting a) Supply and demand for the products can easily be adjusted, by overcoming temporary demand, in the light of the anticipated estimate; and regular supply is facilitated. b) A good inventory control is advantageously benefited by avoiding the weakness of under stocking and overstocking. c) Allocation and reallocation of sales territories are facilitated. d) It is a forward planner as all other requirements of raw materials, labour, plant layout, financial needs, warehousing, transport facility etc., depend in accordance with the sales volume expected in advance.
- 34. Sales Forecasting: Methods ofSales Forecasting The following are the various methods of sales forecasting: 1. Jury of Executive Opinion 2. Sales Force Opinion 3. Test Marketing Result 4. Consumer’s Buying Plan 5. Market Factor Analysis 6. Expert Opinion 7. Past Sales
- 35. Jury of ExecutiveOpinion One or more of the executives, who are experienced and have good knowledge of the market factors make out the expected sales. The executives are responsible while forecasting sales figures through estimates and experiences. Sales force Opinion Under this method, salesmen, or intermediaries are required to make out an estimate sales in their respective territories for a given period. Salesmen are in close touch with the consumers and possess good knowledge about the future demand trend.
- 36. Test Marketing Result Underthe market test method, products are introduced in a limited geographical area and the result is studied. Taking this result as a base, sales forecast is made. This test is conducted as a sample on pre-test basis in order to understand the market response. Consumer’s Buying Plan Consumers, as a source of information, are approached to know their likely purchases during the period under a given set of conditions. This method is suitable when there are few customers. This type of forecasting is generally adopted for industrial goods.
- 37. Market Factor Analysis Acompany’s sales may depend on the behaviour of certain market factors. The principal factors which affect the sales may be determined. By studying the behaviours of the factors, forecasting should be made. Correlation is the statistical analysis which analyses the degree of extent to which two variables fluctuate with reference to each other. For instance, you publish a text book on “Banking”, affiliated to different universities. The permitted intake capacity of each and the medium through which the students are taught are known. Is it a compulsory or an optional subject? By getting all these details and also by considering the sales activities of promotional work, you may be able to declare the probable copies to be printed.
- 38. Expert Opinion Many typesof consultancy agencies have entered into the field of sales. The consultancy agency has specialized experts in the respective field. This includes dealers, trade associations etc. They may conduct market researches and possess ready-made statistical data. Firms may make use of the opinions of such experts. Past Sales Personal judgement of sales forecasting can be beneficially supplemented by the use of statistical and quantitative methods. Past sales are a good basis and on this basis future sales can be formulated and forecast.
- 39. How to PrepareA Sales Budget? While preparing the sales budget, a sales manager should consider the following factors. Past Sales Figures and Trends Sales-men’s Estimates Plant Capacity Availability of Raw Materials General Trade Prospects Orders in Hand Seasonal Fluctuations Financial Aspect Competition
- 40. Designing Sales Territories andSales Quota
- 45. Managing the SalesForce The face of any organization is the sales force. Companies spend a considerable amount of time and money on sales force rather than on any other promotional activity. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. Unit- II, 26.09.2016
- 46. Designing of theSales Force Sales force is linking between companies and customer. Therefore, companies have to be careful in designing and structuring sales force. The first step is setting out an objective for sales force. Earlier companies had a single objective increasing sale making it objective also for sales people. Sales people are asked to perform a search for prospective clients or lead. Sales people are asked to balance time between a prospective customer and current customer. Effective communication of product and services is essential to close the deal. Sales people also play an important role in after sales service and can make a difference for the company. Sales people are eyes and ears of the company in the market gathering information about competition and customer changing demands.
- 47. The second stepis use sales people strategically. Sales people have to combine efforts with other team members to achieve the objective. Sales people should be aware how to analyze market data been provided and convert them into marketing strategies. The third step is deciding the structure of the sales force. The structure of the sales is dependent on the strategy followed by the company. Common sales force structures are as follows:- Territorial structure is used where every sales representative is assigned specific geographical area. This structure is preferred for building relationships with locals. Product structure is used for complex and un- related product portfolio. Here the sales people are directly associated with research and development of the products.
- 48. Market structure isused if the companies are operating different industry or market segments. Every sales force specializes in a definite market and helps push a product efficiently across the given market. However, the disadvantage would arise if customers are located over a wide geographical area. Complex structure is used when companies are in business of selling complex product to different customer across a large geographical area. Here sales force structure is a combination of other structures discussed. The next step is to design compensation for the sales force. Compensation plays a big motivational factor for sales people. Companies follow a structure of a fixed amount plus a variable amount depending of success achieved in the market. Allowances play an important factor in the salary owing to continuous travel and market visits.
- 49. Recruitment & Selectionof Sales Force
- 50. Motivating Sales Force Amotivated sales force can exceed your expectations for revenue and for profit. How do you motivate them to go above and beyond? Here are some ideas: 1. Foster a team environment 2. Coach and mentor them 3. Create some friendly competition 4. Listen to their pain points 5. Give them the tools they need to succeed 6. Show them the money and appreciation
- 51. Sales Force Training& Compensation 1. Use E-Learning to Educate 2. Keep Training Short but Consistent With Micro- Learning 3. Reward Specific Achievements 4. Field Train and Provide Detailed Feedback 5. Share Success Stories
- 53. Salesperson Salesperson isevaluated by multiple raters Helps salespeople better understand their ability to add value to their organization and their customers Internal Custom ers Evaluation Evaluation External Custom ers Evaluation Evaluation Oneself Evaluation Evaluation Sales Manager EvaluationEvaluation Team M embers Evaluation Evaluation
- 54.
- 55. What is DistributionManagement ? Determines optimal quantities of each product to be made at each plant and to be distributed to each warehouse, such that manufacturing.
- 56. Functions of aDistribution Channel oInformation Gathering and distributing market research and intelligence - important for marketing planning oPromotion Developing and spreading communications about offers oContact Finding and communicating with prospective buyers oMatching Adjusting the offer to fit a buyer's needs, including grading, assembling and packaging oNegotiation Reaching agreement on price and other terms of the offer oPhysical Distribution - Transporting and storing goods oFinancing Acquiring and using funds to cover the costs of the distribution channel oRisk taking Assuming some commercial risks by operating the channel (e.g. holding stock)
- 57. Channel Management The processby which a producer or supplier directs marketing activity by involving and motivating parties comprising its channel of distribution.
- 61. Types of Distributors& Strategies Intensive Distributors This type of distributor is normally used when the manufacturer / vendor wants to sell their products as quickly as possible through the widest possible channel. Intensive distributors will work with many vendors and usually sell high volumes of goods at lower prices and earn lower margins. .
- 62. Distributors This type ofdistribution is where manufacturers / vendors select specialized distributors who are experienced at distributing their products. Manufacturers / vendors may restrict the number of retailers that a distributor can supply to in order to effectively reach the target market, maintain a high level of service and retain high retail pricing maximising profit margins for the whole distribution channel.
- 63. Exclusive Distributors This typeof distributor is used when the manufacturer / vendor has a niche market and product with targeted consumers. There will usually be only one exclusive distributor for each territory.
- 64. Direct Distributors With thistype of distributor the manufacturer / vendor to sells and delivers products directly to the consumer. Direct distributors usually choose this route in order to reduce costs by negating the need for a middle man as they would require a share of the profit margin in return for distributing the products. However, direct distributors face several drawbacks. Firstly they are limited to their own physical storage capacity dictated solely by their sales volumes. Secondly they are likely to have much less marketing exposure and significantly higher marketing costs which may in actual fact offset any saving made by not using other types of distributors.
- 65. Indirect Distributors This typeof distributor uses a network of wholesalers, retailers and resellers to distribute their products to consumers, and is the most common type of distributor. Indirect distribution enables manufacturers / vendors to concentrate on production while the distributors focus on generating sales. The distributors sell to their existing customer base of resellers / retailers with whom they have good relationships enabling speedy sales and distribution of products. With this type of distribution there may also be more than one distributor per territory.
- 66. Factors to ConsiderWhile Selecting Distribution Channels Some of the factors to consider while selecting channels of distribution are as follows: Product Market Middlemen Company Marketing Environment Competitors Customer Characteristics Channel Compensation.
- 68.